I have been listening to a couple of radio shows while carting kids around town this weekend, and it is interesting that Atlanta’s Finance guru on the radio, the esteemed Clark Howard, did a special weekend show to take calls about the big bailout, and to explain what that means.
Lot’s of people are rightfully upset about the huge bailout, and other people were very, very scared.
The move was necessary – because it is hard to find a suitable solution to a problem that has been growing and expanding just under the surface for a long time. You know what’s more difficult than finding a solution? Finding a solution overnight. When you let things get to a boiling point and the pot begins to boil over, well, you have to do something about it QUICK!
So, two questions remain: Will this bailout do the trick to stabalize the financial and housing markets? and Will it be a good, long-term solution?
To the first question, Yes, this bailout will indeed get the financial markets on solid ground, because it will do the trick to get foreign buyers to gain confidence in our markets and begin to buy our bonds (debt) again. And, we will see Mortgage Rates stay low and likely go lower still. Confidence will come back into the housing market once the public digests the bailout, and realizes that their Money Market Funds – which became very shakey last week – are now safe, AND, implicitly backed by the Federal Government. That will build confidence.
To the second question, will this be a good, long-term solution? That answer is emphatically, NO.
Changes will have to come and some will need to be deeply rooted and uncomfortable so that we don’t fall into this same situation again, without the same possibility of throwing so much money out of it. The question there is, does the American people and the government leaders have the strength, collectively, to do what is necessary?
For that answer to be ‘Yes’, I think American will need to develop a memory and a sense of history.
OMG! Wha’d ya say?
At least we have a good thing for the short term. And, if you were ever to buy a home, you are in the sweetspot right now. Once sentiment turns, you will not be quite as good. So, if you are in the market around Atlanta, buy now.